Debit cards are hidden financial infrastructure

Post by plorkyeran » Sat, Nov 13, 2021, 4:31 PM UTC

rootusrootus wrote: post #284

beebeepka wrote: post #254

Earlier quoted context omitted.

Dear gawd. I've never heard of this shit before and hope it's not a thing anywhere else. Amazing it's all legal. That's the very definition of fraud

I may be wrong, but I think this is now illegal in the US. I haven't heard of it in a while, at least. But it's also been some time since I left little enough in my account that it could happen to me, or banked at a shitty bank that would even do it to begin with.

Post by [deleted] » Sat, Nov 13, 2021, 4:45 PM UTC

Ozzie_osman wrote: post #283

mherdeg wrote: post #56

Earlier quoted context omitted.

It's not just overdraft fees right? It's overdraft fees plus transaction reordering which makes the magic happen. I'm still kind of mesmerized on this one, it felt like regulatory action almost happened, the most lucrative of the overdraft practices got limited circa 2009/2010, and then banks voluntarily toned it down and the regulators mostly looked the other way on things like reordering?

Yea. For people who aren't familiar with this, the bank will reorder your transactions and batch them to do the biggest one first. Then you get charged an overdraft fee per transaction after that. If they did the small ones first, you may not go into overdraft until the last big one... So you'd pay one fee. Do the largest first, then each small one causes a fee. Highway robbery.

Post by NoblePublius » Sat, Nov 13, 2021, 4:47 PM UTC

mherdeg wrote: post #56

numair wrote: post #43

The beginning of this article is a fairy tale that ignores what used to be one of the biggest drivers of revenue for banks: overdraft fees. Maybe the HN crowd has never been in a situation where they were auto-billed into a negative balance, which then caused an overdraft fee that then further drove their balance into negative territory, but this was a weekly/monthly fiasco for millions of Americans. I was once in a…

It's not just overdraft fees right? It's overdraft fees plus transaction reordering which makes the magic happen. I'm still kind of mesmerized on this one, it felt like regulatory action almost happened, the most lucrative of the overdraft practices got limited circa 2009/2010, and then banks voluntarily toned it down and the regulators mostly looked the other way on things like reordering?

Post by c22 » Sat, Nov 13, 2021, 4:51 PM UTC

passerby1 wrote: post #253

c22 wrote: post #176

Earlier quoted context omitted.

Oh man, I banked with US Bank back in 2003/2004. One day I overdrafted my checking account by about $5. "Overdraft protection" kicked in and they automatically transferred money from my savings account, but not before charging a $25 fee that caused... another overdraft. This repeated automatically over a dozen times in one day to the tune of around $300. I noticed what was going on that evening and manually transferr…

There're several of stories of some level of craziness here in the thread. I wonder why none tried to sue bank? Are banks in the US really above the law? Or probably not too high to be sued, but enough to make good money.

Post by leviathant » Sat, Nov 13, 2021, 5:00 PM UTC

Spooky23 wrote: post #120

raegis wrote: post #75

Earlier quoted context omitted.

It's a little complicated. My credit score has been consistently higher than my wife's score, and but she has never carried a credit card balance in her life. You get high credit score marks for making banks money, but not borrowing so much that they get nervous.

Not really, it’s all about payment history. Use your card for gas, etc is more than enough to demonstrate a pattern of on time payments. People who don’t use credit often get penalized from a scoring perspective because they don’t have a large credit line and have a higher utilization. The bank wants you to make payments, period. More credit lines means you have more resilience.